I'm curious as to all the factors that are taken into account when iTunes constructs a Genius Playlist. Do listening habits such as Play Count and Skipped Count have any effect? Are the ratings that I have assigned to my songs considered at all?

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Itunes looks at your ID3 tags, if they match up with what other users have uploaded than Itunes makes a prediction. As more and more libraries are uploaded the predictions get better and better.

However this is not always the case, as songs that have been uploaded by a CD are still able to get "matched" Some speculate that it works by just the tempo of music that is matched with similar artists and genres.